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Join our panel of leading economic and transportation analysts as they share their exclusive insight on where rates are headed and the issues that will be driving those rate increases over the next 12 months.

ISM numbers speak for themselves

By Jeff Berman, Group News Editor
February 01, 2011

Earlier today, I reported on the Institute for Supply Management’s (ISM) monthly Manufacturing Report on Business. In the interest of not repeating the story verbatim, I will tell you this: it was a very, very good report.

In fact, January marked the third highest monthly PMI—the index ISM uses to measure the manufacturing sector—in the last 20 years, with 1994 and 2004 being the highest.

ISM Chair of the Institute for Supply Management Manufacturing Business Survey Committee Norbert J. Ore told me that 1994 and 2004 were “rapid periods of price escalation in both instances.”

He also explained to me that 2010 never felt like a boom year like those of ’94 and ‘04, when things were what he termed as “out of control” in terms of the rate of growth.

What’s more, he said that we are coming off a very good year in which most people thought the second half of 2010 would see a slow down, when, in fact, it actually sped up. And based on one month of 2011 data in the books, there may be more of that to come for a while, which would appear to be good news for supply chains.

Things are far from normal for anyone at this point, regardless of whether you are a shipper or carrier. But there are some things occurring that have to make even the biggest cynic a tad hopeful.

Need another example? Look no further than today’s UPS fourth quarter and full-year 2010 earnings performance. Wow-they did very, very well. Most experts say that UPS (and FedEx’ for that matter) earnings performances are significant barometers of our economic health. If that is still the case, then our patient—the economy—really does appear to be getting better.

Throw in improving retail and industrial production numbers and steady truck and railroad volume numbers, and then we just might be on to something, right?

I know there is a long way to go and that the patient will remain in the sick ward until housing and unemployment improve to tolerable levels, but at this point we have to take what we can get and hope things continue to improve, regardless of the pace.

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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